I have been building a 1974 1303 super for a couple weeks now. I have installed 944 Brembo brakes on the front and plan to start on the back this weekend. I have been thinking about what kind of drivetrain, mostly thinking Subaru, Audi or rotary. Here is my latest idea. Take a Honda D-series, with it's transaxle, and lay it back at approximately 45 degrees. Rough measurements suggest that it will fit under the engine cover, and that I might even be able to keep the frame horns. Obviously some engines can be ran at that angle (diesel vanagons come to mind), with a custom oil pan, and manny trannies are often flipped completely over. In case you don't know, d series motors are very light with an aluminum block. The best one is 1.6 liters with 130hp stock. I think one of the most difficult things will be coming up with a gearshift linkage that will accommodate the 45 degree tilt. I drew a rough sketch to kind of show what I am thinking.
I'm going to need more info on the Rabbit! LOL ha ha.
Also....just curious......will the configuration allow for 5 forward gears? Meaning you wont have to flip the trans or run the motor the other way etc.